You've probably heard this phrase used a lot in recent times. It's a favorite Republican strategy, even though they'll regularly deny they support it because of the negative connotation.
It's the idea that if you give tax cuts to the wealthy and businesses, they will turn around and spend that extra money either by investing it which creates jobs, or by stimulating businesses with their purchases. To some extent, it's probably true that giving the wealthy tax cuts does result in some increased investment and spending; but not all of those funds will be spent in a way that will help the United States.
Some will be saved/invested in foreign banks and business opportunities, some will be pocketed by shareholders and corporate suits, and even if the money is spent in the American economy, only a certain percent of cost actually goes into the pockets of employees and employers, a large percentage is already spent producing the product which was purchased.
All citizens can agree on what the goal should be: to get money to those who need it to survive, prevention dire of economic conditions, reduction of poverty, and generation of comfortable wealth for the average citizen.
Trickle down economics only provides possible additional employment opportunities and businesses a chance to spend more if they choose. It is essentially putting more money into the pockets of the wealthy and trusting them to spend it in a patriotic way; and even if they do, it only helps the poor and struggling by giving them a chance to serve the rich. I think an economic stimulus package needs to do more than give the poor a chance to serve the rich.
McCain is proposing a 10% tax cut for businesses, from 35% to 25%. How about instead we give 8% to families making under $100,000 dollars a year and invest the other 2% in assisting Americans with higher education. I can guarantee you the poor and the middle class won't sit on it, put it in a swiss bank, build a factory in China, or buy a solid gold swimming pool. And maybe if the rich get lucky some of it will "trickle up."
Trickle Down Economics is just a fancy argument for making the rich richer.
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2 comments:
Don't forget how economists have been saying for years now that the theory is entirely a political position as the actual flow of money is the opposite stated by the theory.
I'm quite fond of Voodoo Economics, as this means Baron Samedi has ways of keeping things under control.
If you could sacrifice a chicken and become rich, would you do it? I totally would.
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